Congratulaions you have just been hired by Knight's Company! Your job is to prepare their monthly performance report. The report is presented to management each month. Report includes the following: 1. A Master budget versus actual analysis for the contribuion margin income statement. The format of the report is a four column report, with Actual data, Master Budget data, the dollar amount of the variance and the variance %. The Variance percentage is calculated by dividing the budget variance by the budgeted dollar amount. 2. An analysis of Return on Sales, Return on Investment, Capital Turnover and Residual Income. These four performance measurements are calculated for the budgeted and actual data. They also include a budget variance for these items (but they do not calculate a variance % for these items.) Prepare the performance report for Knight's Company. Make your own conclusions about their budgeted versus actual performance. 3. Calculate the Flexible Budget Variance and Volume Variance for Sales, Variable Costs, Contribuion Margin , Fixed Costs and Operaing income in a separate analysis from the Master Budget Performance report. See the template at the botom of this page which should help you inish the model. Just put formulas in the grey boxes.

Hints 1. When you create your formulas for variances (for the 1st performance report below) when comparing Actual Performance to the Master Budget, in order to have the variances show minus signs if they are unfavorable follow these instrucions: For things that you want more of as a business owner, because they increase income , subtract the Master Budget number from the actual number. (Sales, Contribuion Margin, Operaing Income. This rule also applies to ROS, ROI, Capital Turnover and Residual Income because "more is beter" with these performance indicators as well. For things that you want less of as a business owner,because they decrease net income, subtract the actual number from the Master Budget number(Variable Costs and Fixed Costs) 2. Format your Variance %'s , ROS and ROI as a percent (ind the % buton up on the toolbar and click it while your cursor is in that cell). Also, format the number so it shows one decimal place. You can do that by clicking the icon on the toolbar that has a let hand arrow & zeros on it. 3. Format your Residual income to be a dollar amount. One way to do this is through "format" at the top of the screen, then "cells", then "number", then select "currency". 4. Format your Capital Turnover as a number with two decimal places

Input Section for the Performance Report: Knight's Company Performance Report: (place your formulas in the grey boxes) Knight's Company Flexible Budgeting Analysis (some formulas have already been inserted in the green boxes to give you a head start)